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Two Duopoly Firms That Sell an Identical Good Form a Cartel

Question 193

Multiple Choice

Two duopoly firms that sell an identical good form a cartel. They decide to collude and fix the price of their good. In this prisoners' dilemma type situation, the likely outcome is


A) both will cheat.
B) neither one will cheat.
C) only one will cheat.
D) It is impossible to say.

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